New research shows generating organic growth to be the key priority, ahead of mergers and acquisitions (M&A), for the post-GFC environment of 2010.
The survey of 60 CEOs and senior executive of leading Australian companies, entitled Growth Insights, was conducted by thinkGROWTH, a business growth and innovation advisory firm. Mike Kaye, thinkGROWTH’s managing director, said the GFC had changed the landscape for growth in Australia.
“The M&A frenzy, which fuelled last decade’s stock market growth, has faded and been replaced by a battle-hardened market more wary of acquisition strategies and financial engineering,” Kaye said.
“Access to capital has also changed, driving an increased scrutiny of growth prospects for companies of all sizes, particularly the mid-market. Organisations will have to build a credible organic growth story. Consequently, companies will need to move away from their overreliance on M&A, which, at best, provides a testosterone fuelled short-term growth fix, with the vast majority of M&A deals failing to deliver significant and lasting value.”
“Instead, businesses need to properly embrace innovation and entrepreneurship to complement their analytically-driven processes, as the market is demanding not just growth but sustainable growth. There’s a big difference,” he continued.
“Of course M&A will always have a role to play, but CEOs who are successful in leading their organisations’ out of the GFC will be those that deliver and execute a more balanced growth agenda, and this will need to be fuelled by fresh thinking and new ideas, as well as tools, processes and skills to successfully manage organic growth.” he said.
